January 6, 2009
Make Your Student Credit Card Work For You
By Student Credit Finance
The purpose of any credit card is to have the credit card company credit you a loan for a certain length of time. Along with this credit card will come a credit card limit. How will they determine your credit limit?
A college student credit card is specifically designed for the college student.
This particular credit card will be the easiest credit card a college student will be able to obtain.
The credit card companies realize they have little to no credit history but are still willing to give them a college student credit card. For this reason the limit will be set lower than other credit cards. Maybe as low as $250 to maybe $500. The credit limit is typically set by the credit score. So obtaining the college student credit card and using it correctly, you will soon find your score is slowly increasing and at the same time your credit limit will as well slowly increase. This is called building a positive credit history.
Building a positive credit history is the number one reason for a college student to obtain a college student credit card. We all know this world we live in revolves around credit, quite literally. In order for our young adults to have a good running chance we need to teach them about credit and how it can work for them as well as work against them if not treated properly.
Our young adults building a positive credit history is important and we need to teach them how to use there college student credit card. It should be used as an emergency tool. Make sure they know they can not just go charging all over town. First of all there limit is not that high and they will have to pay it back. Making there monthly payments on time every single month is critical to creating a positive credit history. Equally important is being able to pay the card off periodically. This is showing the credit card companies that you understand credit and will use it wisely.
A good rule of thumb is to never charge more than 40% of your total limit. If you can not pay it off but make the payments monthly you are at a good place and have excess credit available if needed. The credit card companies really watch the balance activities and will reward you as well as punish you if you do not use there college student credit card wisely. They can punish you by charging late fees, over limit fees and increase your interest rate for the same reasons. They are in control and want you to act accordingly. Respect your college student credit card and it will respect you.
This is the first step in your financial decision and making the right choices as well as doing the right things will help you obtain that financial freedom we are all seeking. What you do today will effect your future. Because of this it is critical you do make the right choices.
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